Bitcoin (BTC) Rally Stalls as Fed Holds Rates Amid Inflation Concerns

Bitcoin's rally hit a roadblock as the U.S. Federal Reserve opted to keep interest rates unchanged in its first policy decision of 2025.

Bitcoin’s rally hit a roadblock on Wednesday as the U.S. Federal Reserve opted to keep interest rates unchanged in its first policy decision of 2025. The widely anticipated move sent Bitcoin (CRYPTO: BTC) sliding by $1,000 almost immediately after the announcement.

With inflation still a concern and President Donald Trump pushing for lower rates, investors are left wondering when or if the Fed will shift its stance.

At the time of writing, the top three cryptocurrencies, Bitcoin, Ethereum, and XRP, had not changed much in the past day but remained down on the weekly chart.

Bitcoin price today is $102,943.64 with a 24-hour trading volume of $63,888,430,000. BTC price has dropped 0.86% in the past 24 hours and 1.29% in the past 7 days.

While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.

No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.

In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.

One could now argue that having to pay 10,000 BTC for 2 pizzas seems like an outrageous overpayment, and they’d be right.

However, keeping in mind that BTC was trading at less than $0.01 at the time, Hanyecz actually paid around $100 for the pizzas.

Moreover, considering that Bitcoin price today is trading at $103,000, had he kept those 10,000 BTC, they’d be worth around $1.03 billion today.

Either way, Hanyecz's transaction opened the door for a new era of possibilities for Bitcoin.

Throughout the years, the cryptocurrency has訕countered booms and busts, and人もther mania and FUD periods.

Chart: Finbold, TradingView

Top crypto prices glance

Bitcoin price today is $102,943.64, a 0.86% drop in the past 24 hours. Over the past 7 days, BTC price has declined by 1.29%.

Ethereum price today is $3,114.24, showing a 1.07% decline over the past 24 hours. In the past 7 days, ETH price has dropped by 5%.

XRP price today is $0.8189, showing a 0.28% decline in the past 24 hours. Over the past 7 days, XRP price has dropped by more than 5%.

Fed holds rates amid inflation

The Federal Reserve decided to maintain its benchmark interest rate at 4.25%-4.5%, citing inflation risks and economic uncertainty, Reuters reported.

The move was expected, as the central bank had previously hinted at pausing rate cuts following a 25-basis-point reduction in late 2024.

However, the decision is likely to increase tensions between the Fed and the Trump administration, which has been vocal about the need for lower borrowing costs.

While last week's Consumer Price Index data suggested inflation was not as severe as anticipated, the Fed remained cautious.

Officials omitted previous language about "progress" on inflation, signaling that concerns persist.

The central bank also highlighted the impact of Trump's trade policies on inflation and economic growth.

Officials noted that while tariffs could lead to higher prices, they also acknowledged the administration's efforts to boost economic activity.

The statement adds that the board continues to monitor incoming data and will adjust the stance of monetary policy as needed.

Fed Chair Jerome Powell and his team now face a complex economic landscape shaped by Trump's policy proposals, including potential tariffs and deregulation efforts.

Chair Powell answers reporters' questions at the FOMC press conference on January 29, 2025.

Trump's economic policies add uncertainty

If the Fed remains hesitant to cut rates further, riskier investments could face more pressure.

President Trump's return to the White House has brought new economic policy challenges.

His calls for aggressive tariffs, including a proposed 25% levy on imports from Mexico and Canada, could disrupt global trade and fuel inflation.

At the same time, his push for tax cuts and deregulation aims to stimulate growth but could also complicate the Fed's ability to manage inflation.

The central bank previously modeled different tariff scenarios in 2018 and concluded that aggressive trade policies could lead